Dr Jonathan Owens, lecturer in Operations Management at the University of Salford Business School, and expert in supply chains, talks about what might happen next after Theresa May suffered a huge defeat in the Commons on her Brexit deal.
Dr Owens said: “The UK parliament has rejected the Brexit deal agreed between Mrs May and Mr Barnier. Therefore, by default the UK will leave the European Union (EU) with no deal on the March 29 this year. From then the UK would enter all future trade agreements set out by the World Trade Organisation (WTO), and indeed that is how we already currently trade with some of our international trading partners.
“If you are not sure how this applies, then look round your own home and see how many products you have purchased that are not made in the EU. Many Government supporters of Brexit have consistently argued that failing to reach a deal wouldn’t be all bad and leaving with no deal would mean the UK could work to get a favoured nation status under WTO to trade with the rest of the world.
“However, regrettably this would not be as simple as it sounds to develop, i.e. new trading channels, routes, tariffs, supply chains etc. For example, if we consider tariffs, Britain currently trades with twenty-four countries and territories under the sole agreement of WTO rules. However, with sixty-eight countries, it has either fully or partly in place the EU free trade agreement, that enables the UK to trade on better terms.
“Inevitably, while there would be some disruption, these issues are not insurmountable. After all, UK businesses are resilient, adaptable, resourceful and have some become the envy of their competition,
“Finally, people should take with caution the long term economic forecasts that UK growth would be reduced by eight per cent with a no deal. Many businesses will make alternative arrangements; otherwise (unlike the UK Government) they may not have a business to run.”